Analysis: On 'massacre' anniversary, South Africa mines still volatile

MARIKANA, South Africa (Reuters) - A year after South Africa's bloodiest post-apartheid labor incident awoke the world to the potential for unrest in the country's mines, the industry still suffers from worker poverty, pay disputes, shrinking profits and a violent union feud.

At Lonmin's Marikana mine where 34 striking platinum workers were shot dead by police on August 16, 2012 in killings that shocked South Africa and the world, memorial services are planned for Friday by politicians, unions and civic leaders.

President Jacob Zuma, still facing criticism for his African National Congress (ANC) government's handling of what has come to be known as the "Marikana massacre", has led a solemn chorus of assurances that such bloodshed must never happen again.

"We must all resolve to do everything possible to prevent a repeat of similar incidents," Zuma said in a statement listing government steps to keep the peace and improve conditions in the country's mines, where recurring illegal strikes have badly dented Africa's biggest economy over the last year.

On Friday, prayers will be offered at the rocky outcrop known as the "Hill of Horror" near the Marikana mine where the 34 strikers, many carrying clubs and spears, died in hail of police gunfire when officers moved to disperse their protest.

Plain white wooden crosses stand in memory of the dead.

As a government inquiry set up to establish responsibility for the killings drags on with no end in sight, in the hard-scrabble miners' shanty settlements that surround the Marikana shafts, there are little visible signs of change.

Children still play in mounds of rubbish beside tin-roofed shacks, and jobless men dig trenches to divert rivulets of raw sewage away from homes.

With the shadow of the Marikana deaths still hanging over them, mining companies and fractious workers' unions have squared off in another round of bitter bargaining over wages - their respective positions on salary hikes still miles apart.

Violence still stalks the mining shafts and communities as sporadic murders of union officials betray a membership turf war being waged between the mainstream National Union of Mineworkers (NUM) and its hardline challenger, the Association of Mineworkers and Construction Union (AMCU).

"We are still waiting for the changes," said Malusi King Danga, a 28-year-old Lonmin worker who was involved in the strike protest last year.

"It's like we were killed for nothing, like we were jailed and beaten up for nothing," he told Reuters.

An AMCU member, he spent three weeks in police custody last year on suspicion of inciting violence before being released with the charges dropped.

"The mines and the money it brings to the country are more important than the miners who live in shacks," Danga said.

"Next year is elections, I am sure President Zuma will come here. I am sure the ANC will put their posters on every light pole and give us T-shirts and food parcels. But after the elections, everything will go back to normal."

Last year's wave of wildcat strikes spurred by the NUM-AMCU membership war led to damaging credit downgrades for Africa's economic powerhouse and also dented the ruling ANC's projected image as a movement serving the poor and working masses.

Zuma and his government face persisting accusations that the political class serves a wealthy corporate class more assiduously than they do the vast majority of struggling South Africans. That fuels the union battle, with the AMCU accusing ANC-allied NUM bosses of being part of the ruling elite.

The threat of an immediate fresh strike at Marikana was eased this week when Lonmin, the world's No. 3 platinum producer, signed a deal with AMCU recognizing it as the majority union at its mine, although labor tension remains high.

TOUGH TALKS

Ongoing wage talks in the South African mining industry are among the toughest ever as the claims of workers clash with falling prices and razor-thin company margins.

NUM and AMCU are seeking pay hikes ranging from 15 to 150 percent in the gold and platinum sectors, which companies say they can hardly afford. Still, this year has seen fewer illegal wildcat strikes so far than last year.

In January, Lonmin announced new initiatives aimed at improving labor relations and building trust with employees. It has built new housing, helped families pay the costs of funerals for the victims, and set up an education fund.

But experts say more lasting solutions are required to tackle deep rooted social problems that go back to South Africa's history as a mining power forged under the stark inequalities of the apartheid system of white minority rule, which ended 19 years ago.

"Post 1994, the mining companies have just perpetuated the cheap migrant labor system in this country rather than changing it," said David van Wyk of the Bench Marks Foundation, a church-linked organization that monitors corporate responsibility.

Still today, most of the platinum belt's workers come from rural areas and support on average eight to 10 family members living in poverty back home, according to industry data.

"For as long as they have that system in place, we are going to have the problems we have in Marikana repeat themselves," van Wyk said.

COMMISSION STALLED

Government action has been slow at best. The Marikana commission of inquiry was due to conclude its investigation by last December but proceedings stalled and lately were suspended because of lack of funding for lawyers representing the victims.

Zuma also set up an Inter-Ministerial Committee to seek solutions to the social problems plaguing mining communities, but after a few months it largely faded from the scene. A spokesman for the committee did not respond to numerous calls and messages asking for details of its activities.

According to industry data, mining employment dropped by about 4 percent some four months after the Marikana killings, with analysts saying the violence accelerated a downward cycle.

While last year's Marikana strike was ended by a wage settlement awarding salary increases of up to 22 percent, this has not been matched by more productivity in the sector. South African mine output dropped in June by 6.2 percent while production of platinum group metals fell by 18.9 percent.

Investors have punished mining houses. While the Johannesburg Stock Exchange's broad All-Share index has increased by about 20 percent in the past year, the mining index has dropped by about 3 percent. Major mining firm Impala Platinum dropped by about 18 percent.

Marikana worker Danga remembers his childhood dream of going to university and working in an air conditioned office. This was cut short in 2009 when his mother in the Eastern Cape province died, his three orphaned brothers became his responsibility and he moved to the mines to get work.

"I take home 3,000 rand and after I pay my bills I have 200 rand left. I joined AMCU to fight for higher wages," he said.

Of his time in jail, he said: "I have paid my price." He added that he expected no help from unions or government.